here are 3 priorities to secure Australia’s future

This is an edited excerpt from Danielle Wood’s keynote speech at the jobs summit. Read more articles from The Conversation series on the summit here.

In an economic landscape that is increasingly digital, increasingly focused on service-sector work, and increasingly focused on an impending net-zero emissions deadline, I would like to highlight three priorities to ensure the Australia’s future.

Priority 1: invest in human capital

Microsoft founder and philanthropist Bill Gates has argued that the best leading indicator of a country’s prospects 20 years from now is the performance of its education system. Unfortunately, this indicator does not look too hot for Australia.

Data from the OECD shows that the performance of Australian students in reading and mathematics is declining, both over time and relative to other countries.

The average Grade 9 student is more than a year behind in math compared to the student of the same age at the turn of the century. For reading it’s about 9 months.

Read more: As the Jobs Summit talks about skills, we predict which occupations will experience shortages and surpluses over the next 2 years

Equally worrying, the learning gap between pupils from privileged and disadvantaged backgrounds more than doubles between 3rd and 9th.

If we want to prosper as a nation, we simply have to turn the tide.

There is more and more evidence on what works in terms of teaching, but we are having a harder time translating this into practice in the field. And we need to do much more to attract and retain top-performing teachers.

There are other aspects of education that will also need to evolve if we are to remain a leading economy in the decades to come:

  • strengthen the vocational education and training system which has been left as the poor cousin of universities

  • improve links between industry and vocational and higher education institutions to create feedback loops on what is needed as jobs evolve

  • recognize that education is a lifelong endeavor – for example, through the recognition of micro-degrees and support for on-the-job training

  • attract the best and the brightest to Australia by improving the composition and operation of our migration program.

Priority 2: make better use of our talent pool

Australian women are among the most educated in the world, but we rank 38th in the world when it comes to women’s economic opportunity.

Women are often excluded from full-time work, and from the most prestigious and well-paid roles, because these so-called “greedy” jobs are incompatible with the burden of unpaid care work still disproportionately borne by women.

I can’t help but think that if women’s untapped participation in the labor market were a huge mine of minerals, governments would be lining up to give tax breaks to push it out of the ground.

High-quality, low-cost early education and care is needed to unlock the participation of women who would like to work more but are sidelined by substantial financial barriers.

But generational change will only happen if men are also encouraged to participate more in unpaid care work. Cultural shifts like this tend to unfold over decades rather than years, but politics can shape culture.

Read more: Yes, we know there is a ‘skills shortage’. Here are 3 job summit ideas to start tackling it right away

It is equally important that we address the economic and structural barriers preventing other groups from fully participating, including disabled Australians, our First Nations people and older Australians.

Ensuring care jobs are good jobs – paying care work properly is going to be key to providing the quality and quantity of health, disability and elderly care services that our elderly population will need.

Fifty-eight percent of child care workers receive adjudicated wages, which can be as low as $22 an hour. You can certainly understand why an early childhood educator might decide to step away from their important but emotionally taxing role to take on a better paid position at Bunnings or McDonalds.

Priority 3: restore economic dynamism

The Australian economy, like all of us, is looking older, bigger and slower.

Rates of business births and business closures declined in the pre-COVID years, hampering the normal flow of resources from low-productivity to higher-productivity activities.

Not only is Australia not experiencing a ‘Great Quit’, we are experiencing something like the opposite – the proportion of workers changing jobs has been declining for decades.

Lower levels of dynamism and innovation have been linked to a lack of competitive pressure in the economy. In competitive markets, excess profits should be dissipated as new, innovative competitors enter. Increasingly, the most profitable companies are not hampered by new competitors.

Work by the Grattan Institute shows that of the 20% most profitable companies in Australia in 2015, almost a third were among the most profitable ten years earlier. A recent study by Australian Competition Minister Andrew Leigh reveals that the turnover of our market leaders has slowed.

Read more: The summit must change our jobs. That would make most of us better

Being relaxed and comfortable can be good, but it’s not good for Australia’s long-term economic prospects.

It would be useful to ensure that Australia’s competition laws are fit for purpose. The former head of the Australian Competition and Consumer Commission, Rod Sims, has argued that current merger laws do not sufficiently protect competition. His warnings should prompt serious reflection.

Economists have long warned of the loss of productivity due to rent seeking (seeking special favors). We shouldn’t be a country where companies see more benefit in lobbying for a better deal with governments than in investing in better products and services.

The Grattan Institute’s 2018 report, Who’s in the Room?, suggests this concern is real for Australia. Heavily regulated sectors such as mining, real estate and construction, and gambling are characterized by remarkably high levels of political donations and lobbying relative to their relative economic contribution.

We need to be bolder

Finally – what about our people? How do we encourage workers to be bold and thrive in a more dynamic economy of the future?

The 2018 OECD International School Education Survey found that 42% of Australian teenage boys and 52% of teenage girls expect to be in one of ten common jobs by the age of 30, including a lawyer , doctor or policeman. This set of aspirations has actually narrowed since the turn of the century.

This ignorance of the universe of possible professions, particularly in high-growth sectors, diverts young people from the most promising career paths for them and for the country.

High household debt limits young people’s ability to change jobs later or take the risk of starting a business.

If we really want to improve the mobility of workers, we must also take into account the role of the social safety net. Upgrading skills or even changing jobs can be costly and risky, especially for the most vulnerable workers.

Read more: First Nations workers are everywhere. Jobs Summit also to address Indigenous-led jobs policy

The summit comes at an extraordinary time. Unemployment is lower than I have known in my lifetime, and we are at the start of significant structural changes in jobs and activity as our economy decarbonizes and digitalizes.

We must make full employment a political goal and take advantage of the extraordinary opportunity to give our long-term unemployed, older jobseekers and people with disabilities a chance to participate in paid work.

We need to invest heavily in human capital, reverse the downward trend in our educational outcomes, rebuild vocational education and improve the quality of the signals we send to our young people about what will be needed in the future.

We must embrace the principle that no one who wants a job or more hours should be held back by structural barriers such as expensive or inaccessible care.

And we must recognize the importance of driving innovation, strong market competition, better policy design, and public investment in enablers like cybersecurity, to becoming a technology frontier economy.

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